For 25 years, hospitals and clinics have had to pay an annual membership fee of as much as $1,200 to legally use the most popular set of standards for the electronic exchange of health information.

On Tuesday, the nonprofit organization responsible for developing those standards, Health Level Seven International, said its intellectual property will be available for use free of charge beginning in the first quarter of 2013 .

"This announcement is the most significant standards development in the past decade," said John Halamka, CIO of the Beth Israel Deaconess Medical Center and professor of medicine at Harvard Medical School. "It ensures that every stakeholder will have ready access to the content standards they need for meaningful use. Enormous thanks to everyone who worked on this effort."

Health Level Seven (HL7) is a series of standards and guidelines that enable hospitals to exchange medical information, such as electronic health records (EHR). HL7 is also promoted by Integrating the Healthcare Enterprise (IHE), an international initiative by healthcare professionals to improve the way computer systems share information.

The term HL7 is also used to describe standards based on the Open Systems Interconnection (OSI) model. The IHE promotes HL7 and standards such as Digital Imaging and Communications in Medicine (DICOM) standard, which is designed to help providers to share digital images.

The federal government's guidelines for so-called "meaningful use" of EHR technology are based on HL7. In order to receive reimbursement funds to defray the cost of EHR systems -- and to avoid penalties for failing to use such systems -- healthcare providers must meet a three-stage set of criteria to demonstrate that they are making meaningful use of the technology. The second set of guidelines for meaningful use, or Stage 2, was released last week.

Charles Jaffe, CEO of HL7, said his organization chose to remove the membership fee requirement for the HL7 standards to foster greater adoption.

"We felt ... the world healthcare community would be a better place if we could share this information. It sounds very apple pie and romantic, but it's the truth," Jaffe said. "HL7 believes that freely available standards more effectively advance healthcare information interoperability."

One of the most prominent aspects of the Stage 2 meaningful use criteria is the requirement for healthcare providers to be able to share patient medical data with one another through health information exchanges.

However, three quarters of the time, primary care providers don't get simple discharge information from hospitals on their patients, according to Claudia Williams, director of the State HIE (Health Information Exchange) Program at the U.S. Office of the National Coordinator (ONC) for Health Information Technology.

"Only 20% of hospitals [were] exchanging clinical records electronically in 2010," Williams was quoted as saying during a webinar in a Computerworld article in May. "A lot of information is not getting to its desired destination quickly enough or accurately enough. We're in a world where a lot of patient-information sharing still occurs on paper."

While Jaffe acknowledged that removing the fee associated with the use of the HL7 standard could hurt membership in his organization, he said he believes that membership will grow since the Stage 3 meaningful use criteria are under development by the ONC. Members of HL7 will have a greater opportunity to provide input into the development of those federal rules, he said.

The federal government has already poured millions of dollars into creating regional and state level HIEs that act as engines for providers to exchange patient information. The federal government is also in the process of developing a Nationwide Health Information Network, which is aimed at making it possible for a patient's health information to travel anywhere the patient goes.

Private vendors, such as Verizon, have also created cloud-based patient health information exchanges.

Yet the health information exchange market is still nascent.

Williams said the federal government recognizes that there won't be a single model for deploying HIEs, although it wants a single standard for exchanging the data so that all HIEs can speak the same language. The existence of different protocols for data exchange is making it expensive to set up HIEs, she said.

"HL7's vision is to make its collaborative, consensus-driven standards the best and most widely used in healthcare," Jaffe said. "By eliminating this barrier to implementation, we can come closer to realizing our goal, in which healthcare IT can reduce costs and improve the quality of care. Coupled with increasing government demand for standards that do not require a licensing fee, our decision to move toward free standards is perfectly aligned."